The model (graph) below represents a small country trade of good X after the government decidedto impose tariffs on import. Consider the case of trade after tariffs. Please answer the followingquestions:• What area(s) represent the loss of surplus to producers?What area(s) represent government revenue?• Describe the impact of a tariff on social welfare. Refer to the graph to support your answer.PwePwDOstQuantityQsPrice

Tariffs are taxes imposed on goods and services imported from other countries.

• What area(s) represent the loss of surplus to producers? • What area(s) represent government revenue? • Describe the impact of a tariff on social welfare. Refer to the graph to support your answer. Pwn Pw D Qs Qo Quantity Price

• What area(s) represent the loss of surplus to producers? • What area(s) represent government revenue? • Describe the impact of a tariff on social welfare. Refer to the graph to support your answer. Pwn Pw D Qs Qo Quantity Price

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter3: Demand And Supply

Section: Chapter Questions

Problem 6SCQ: A tariff is a tax on imported goods. Suppose the U.S. government cuts the tariff on imported flat...

See similar textbooks

Similar questions

A tariff is a tax on imported goods. Suppose the U.S. government cuts the tariff on imported flat screen televisions. Using the four-step analysis, how do you think the tariff reduction will affect the equilibrium price and quantity of flat screen TVS?
How would direct subsidies to key industries be preferable to tariffs or quotas?
Asap plz Do you agree that international trade based on external economies of scale may actuallyleave an economy worse off than it would have been in the absence of international trade?Justify"your answer.
Suppose the nation of Isoland is an importer of textiles and is looking for a way to raise government revenue. The following graph shows the effect of a tariff on textile imports. Price of Textiles с G 1 B Supply P+T D E F Demand PW I Q "S,1 $2 Quantity of Textiles Having rejected a tariff on textiles (a tax on imports), the president of Isoland is now considering the same-sized tax on textile consumption (including both imported and domestically produced textiles). Under a textile consumption tax, the quantity of textiles consumed in Isoland is and the quantity produced in Isoland is The following table shows the effect of an import tariff on the nation of Isoland. Complete the remaining columns of the following table by indicating the effect of the same-sized tax on textile consumption. Under Tariff Before Tariff or Tax After Consumer Surplus Producer Surplus Government Revenue None Total Surplus A+B+C+D+E+F G A+B Change -(C+D+E+F) Under Consumption Tax After Change C+G +C E +E…
Consider the arguments for restricting trade.a. Imagine that you are a lobbyist for timber, anestablished industry suffering from low-pricedforeign competition, and you are trying to getCongress to pass trade restrictions. Which twoor three of the five arguments discussed in thechapter do you think would be most persuasiveto the average member of Congress? Explain yourreasoning.b. Now assume you are an astute student ofeconomics (not a hard assumption, we hope).Although all the arguments for restricting tradehave their shortcomings, name the two or threearguments that seem to make the most economicsense to you. For each, describe the economicrationale for and against these arguments for traderestrictions.
The graph to the right shows the market for water bottles in Thirsty-country with free trade (S1), with tariffs (S2), and with domestic firms only (S3). Shade in the area to show the amount of the tariff collected. Drund irgok: 15 Tritf6-45-15 f 15x (205) Quanty thousand
> O ho signment - ECN204 021- Introductory Macroeconomics - W2023 apter 17 Assignment i 1 B 02:44:19 W b Success Confirmation 4+ Help
The following graph is the respective production possibility curves for the USA and South Korea. It shows there total output of medical devices and cars in a state of autarky (no trade), and it illustrates the gains that both countries can benefit from when they engage in trade. 10,000 10,000 8,000 tc 8,000 6,000 6,000 Consumpfion wth trode Consumplion wih trode 4,000 4,000 2,000 2,000 D. 1,000 0.5 1 3 2. 3 Automobiles (millions) Automobiles (millions) (a) USA (b) South Korea Medical Devices Automobiles (millions) USA 4,000 0.5 million South Korea 1,000 2 million Answer the following questions utilizing the textbook and your lecture videos: 1) What assumption in the production possibilities model may lead the model to overstate the gains from trade and cause the actual gains to be less than predicted by the model? 2) Who gains from trade in this scenario? Who may be hurt by trade in this scenario? 3) Do you think there is a role for the government to help those who are hurt by trade in…
Suppose the nation of Isoland is an importer of textiles and is looking for a way to raise government revenue. The following graph shows the effect of a tariff on textile imports.
Recently the U.S. government filed a complaint with the World Trade Organization (WTO) that the Spanish government was subsidizing exports of ripe olives, which are used as an ingredient in other products, such as olive oil. In the U.S., who benefits from the Spanish subsidy of ripe olives to the U.S.? U.S. government imposes a countervaliling duty (tariff) on imports of ripe olives, who benefits? O producrersof ripe olives; producers of olive oil O producers of olive oil; producers of ripe olives O producers of olive oil; producers of olive oil O producers of ripe olives; producers of ripe olives If the
Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel. ecause this country exports steel, the world price is represented by . Suppose that a “pro-trade” government decides to subsidize the export of steel by paying $10 for each ton sold abroad. With this export subsidy, the price paid by domestic consumers is per ton, and the price received by domestic producers is per ton. The quantity of steel consumed by domestic consumers , the quantity of steel produced by domestic producers , and the quantity of steel exported . True or False: With the export subsidy, domestic producers will sell steel to domestic consumers and sell the rest abroad. True False Under the export subsidy, consumer surplus is and producer surplus is . Government revenue by (increases or Decreases) . As a…
Two countries, Korea and Vietnam, are engaging in international trade.They produce two goods: automobiles and cloth. We observe a relativeabundance of cheap labor in Vietnam and a relative abundance of capitalin South Korea. a. Assume that automobiles are capital-intensive and cloth are cheaplabor-intensive. Using the Hecksher-Ohlin theory, explain what willhappen in trade between these two countries, in terms of export andimport. c. Draw a graph that shows the above situation in South Korean economy with a P P F and two relative prices (one before trade and theother after trade). The quantity of automobiles (QAuto) is on thehorizontal axis and the quantity of cloth (QCloth) is on the verticalaxis.